The public debate about insurance challenges in the strata sector is often dominated, on the one hand, by the view among apartment owners that premiums are very high and, on the other, the furore over unethical conduct by some strata managers and brokers with their high and often opaque fees and commissions.
In NSW, that debate has quietened down in recent months - partly because transparency is now playing a more explicit role in how the industry does business. One of the clearest signals came from major strata manager Netstrata, which moved to a commission-free, fee‑for‑service model for new management agreements from January 1 2026, explicitly positioning the shift as a response to rising expectations around transparency and trust.
At the same time, the sector keeps being dragged back into the accountability story by fresh episodes that reinforce why governance matters. Last month, media reported that a former strata property manager in Coffs Harbour was banned for life from the real estate and strata management sectors after Fair Trading uncovered hundreds of allegedly fraudulent transactions across dozens of strata schemes.
However, other, arguably bigger strata insurance challenges haven’t gone away. For insurers and brokers, the hard part isn’t simply pricing a building; it’s navigating an ecosystem of sometimes competing interests including the different owners, building managers, committees, strata managers, tenants and construction firms.
Ryan Neville (pictured), Crawford & Company’s head of strata, said the industry’s first structural fault line can be decision-making itself: strata governance is fragmented and the early claim stage is where momentum is most likely to leak away. The practical consequence for brokers and insurers is that “time” isn’t a neutral variable in strata. Late notification, delayed access, or slow authorisations can turn a containable incident into a causation argument, a scope dispute and ultimately a cost blowout.
“A practical shift that helps everyone is early notification and provisional engagement of an adjuster as soon as damage is spotted, even while internal approvals are still moving,” he said.
In strata, the picture can be changing before the insurance machine has even started. Temporary repairs alter evidence. Water migrates. Multiple parties start commissioning their own opinions. By the time an adjuster is formally engaged, the claim can already be politically “owned” by internal strata factions.
The temptation in strata is to treat delays as administrative clutter - forms, minutes and the slow grind of committees. But Neville said delays are a governance outcome and they’re predictable.
He said the early stages are where alignment breaks down: committees, managers, owners, brokers and insurers all need to work out who can authorise what. When that clarity is missing, the claim doesn’t just slow down; it drifts into debate. Provisional engagement of an adjuster, in his telling, doesn’t bypass governance - it stabilises it, because it replaces speculation with information and starts moving the conversation toward remedy rather than blame.
The broker’s role, then, is like a systems designer: setting expectations at placement, pre‑agreeing the authority pathway and ensuring the scheme knows what to do in the first 24-48 hours. In a market where premium anger often becomes claims aggression, the schemes that can prove discipline: fast notification, clean documentation, clear delegations, are also the schemes that can credibly argue they are lower-risk clients.
The second fault line is the one the entire market has been circling for years: water ingress, defects and the maintenance-versus-insured-damage argument. In strata, “leak” is not one peril; it’s a family of failures - some sudden, some gradual, some caused by weather and many caused by the slow physics of ageing membranes and poor building detailing.
“Water ingress is the repeat offender in strata,” said Neville.
He identified a common pattern: aged or poorly performing balcony waterproofing that lets water track into common property or adjoining lots, with window seals, roof flashings and wet area membranes also in the mix. The dispute trigger is the grey zone - gradual deterioration versus sudden consequential damage - especially when the leak has been developing out of sight long before it shows up internally.
For brokers, the placement and renewal implication is straightforward but often neglected: you can’t wait until claim time to learn the building’s maintenance story. Neville’s prescription is practical: keep basic records on file — recent waterproofing inspections and recommendations, maintenance logs for high‑risk areas, repair history with dates and scope, and a short note on known defects and planned rectification. In disputes, this context is leverage and can help prevent or win arguments. It can also help insurers differentiate between buildings that manage risk and buildings that merely endure it.
Another major challenge comes from strata claims connected to deferred or incomplete maintenance regimes, unresolved defects and deficiencies in mitigation planning. Neville said this is usually not wilful neglect; it’s a governance capacity issue. Committees don’t always understand that slow maintenance decisions translate into claim frequency and claim frequency translates into premium pressure.
He also flagged a pattern that claims teams see constantly: superficial repairs that “tidy up” without treating root cause, breeding repeat losses and bigger bills. That loops back into pricing, re-underwriting, excess increases and exclusions — fuel for the next AGM meltdown.
“Most of these problems are not about wilful neglect,” said Neville. Strata risk is produced by a system — fragmented decision-making, imperfect incentives, uneven competence — and the insurance outcome is increasingly determined by how well that system is managed.
The broker’s opportunity could be to turn claims learnings into a coaching program: translate common loss drivers into a building-specific checklist; push capital works programs toward resilience upgrades rather than like-for-like replacement; encourage better trades and better diagnostics and insist on records that prove the underlying cause was actually addressed.
